Learning Goals

Key learning goals: This topic will continue the discussion of marketing

management issues, especially marketing mix and product life cycle.

1. Explain the four elements of marketing mix.2. State the difference between place and promotion.3. Explain the stages of product life cycle.4. Explain how a business can extend its product life.5. State the reasons why a business may analyze its

product life cycle.

LEARNING GOALS

What is marketing mix?• Marketing mix refers to those four elements

(product, price, promotion, and place) of a firm’s marketing strategy which are designed to meet the needs of customers. These are often known as the four “Ps”.

• Simply, to meet consumers’ needs, businesses must produce the right product, at the right price, make it available at the right place, and let consumers know about it through right promotion.

Marketing (2)-Marketing Mix


Figure 10-1 Elements of marketing mix:

Product: Products must be ensured to meet the needs

of customers in terms of the following aspects:1. Appearance 2. Function 3. Cost

Marketing (2)-Marketing Mix: Product

Table 10-1 Features of a product to meet the needs of customers

Aspects Brief explanations or examples

The appearance Color, size, shape, etc. must meet the consumer needs.

The function Able to be used Convenient for use Meeting special needs of customers

The cost Production costs must be low enough to earn some profit.

High cost, higher price. Too high price, customers unlikely to buy.

Marketing (2)-Marketing Mix: Product

Marketing (2)-Marketing Mix: Price

Price: The pricing policy that a business chooses is

often a reflection of the market at which it is aiming.

The right price set must take into account of production costs, competitors’ prices and consumers’ purchase ability and demand level.

Table 10-2 Influences from the pricing factors

Factors Influences on the price of a product

High production costs High production costs would mean the high sale price for the goods supplied by sellers.

High customer demand

High customer demand will lead to the increased price of the goods or services. Suppliers are more wiling to provide the goods or services as it is more profitable for them to supply.

Low prices charged by competitors

If the price of the substitute product offered by competitors decreases, the demand for a product will be decreased as well.



Attention: High-price strategy

• In general, from the economic point of view, the higher the price of a product is, the less quantity demanded by consumers. Or there are few buyers who would like to high-price products.

• However, in practice, a business may charge a high price because it is aiming to sell to those customers who regard its products as unique and high quality although the production costs are not high. For example, high pricing strategy is one of the marketing strategies for China Haier.

Marketing (2)- Marketing Mix: Place

Definition: Place refers to the means by which products can

be distributed to the consumers. The product must get to the right place at the right time.

Decision making may be based on the following:1. How the product is distributed physically, such

as air, sea, rail, or road.2. How the product is sold, such as through

retailers, wholesalers, or direct mailing, etc.

Marketing (2)- Marketing Mix: Promotion

Definition:• Promotion refers to a number of promotional

methods, such as advertising, sales promotion, competitions, and personal selling, etc.

• A business must choose a method of promotion which is the most effective in its particular market and for its own product. For example, TV advertising may be better for the product with a high sales turnover or a wide appeal. But for high-technology machines or equipment, it is better to choose personal selling methods.


Question for your critical thinking: Please guess what each of the four “Ps” on

the side of business represents on the side of customers (four “four Cs”) in the marketing mix?


Factors for making choices of marketing mix:

1. The type of product sold, e.g. for high tech.-equipment, the business needs to emphasize the product and its quality rather than promotion.

2. The market sold to, e.g. for consumer markets, promotion may be emphasized.

3. The degree of competition, e.g. if the competition is high, price is needed to be emphasized in order to gain some advantages in the market.

4. The position of the business in the industry, e.g. if the business is large or the market leader, it has more freedom to choose the market mix.

5. The stage of product life cycle in which a product is, e.g. if the product is in the stage of introduction, of course, promotion must be emphasized...

Marketing (2)-Product Life Cycle

Definition: Products pass through several stages of development in its life

from introduction to decline:

Stages of product life cycle usually include: 1. Development 2. Introduction 3. growth 4. Maturity 5. Saturation 6. Decline Explanations: See the following tables and figures.


The stages of the product life cycle:

Development Introduction Growth Maturity Saturation Decline

Table 10-4 Explanations of the stages of Product life cycleStages Brief explanations

Development

The product is being designed.Suitable ideas are tested.Decision is to be made whether or not to produce the product.If OK, the business begins to produce.

Introduction

The product is new in the market.Sales are still low and increasing. Promotion is needed to increase the sales and make it aware widely. Product is still not profitable.

Growth

The product is established in the market.Sales begin to grow rapidly.The product becomes very profitable.The business needs to seek new opportunities and enlarge the market.

Maturity

The product has a stable market share.The growth levels off in the sales. Sales have reached the top.Competitors have entered the market. The business needs to consider new product development or innovate the product.

Saturation

Too many competitors have entered the market.Some businesses are forced out of their business.Businesses have to develop some extension strategies to extend their product life cycle. For example, find new uses of the product; finding new markets for the product; changing components of the products, etc.

Decline

Sales decline.Consumers have changed their taste or styles. New products have to be produced by competitorsBusinesses have to develop new products or improve the old product with new technology or simply give up the product.


Uses of product life cycle:

The reasons why the business needs to analyze the product life cycle are as follows:

1. It can help a business find out which stage its product is in;2. It can help to find out when to launch a new product or stop the

production of a product;3. It can help to identify when to introduce an extension strategy;4. It can help to identify the revenue trends or profitability of a product at

each stage;5. It can help to plan different marketing strategies for a product in

different life cycles…

• Marketing Strategy Implications of the Product Life Cycle

• Categories of Nontraditional Marketing

Expanding Marketing’s Traditional Boundaries

• Nontraditional Marketing– Person Marketing—efforts designed to attract

attention, interest, and preference of a target market toward a person

– Place Marketing—attempts to attract people to a particular area, such as a city, state, or nation


• Nontraditional Marketing– Cause Marketing—efforts to promote a cause

or social issue, such as the prevention of child abuse, antilittering efforts, and anti-smoking campaigns


• Nontraditional Marketing– Event Marketing—marketing or sponsoring

short-term events such as athletic competitions and cultural and charitable performances

– Organization Marketing—attempting to influence consumers to accept the goals of, receive the services of, or contribute in some way to an organization

Developing a Marketing Strategy

• Target Market and Marketing Mix within the Marketing Environment

Documents

Learning Goals